Planstrong FInancial Forum 02-18-17
Feb 19, 2017|
"Smart investing, simplified"
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
From the plan stroll in the broadcast studios it's good play and strong environmental forum where your host. Jim Karr murdered Campbell president plans strong investment. Full portions there's still I'm Bruce Morton investing. Certainty at all. And I'm Jim Cooper the anchor desk along with all Karstens it is the plans drawn financial forum and Paul welcome back to the program. Thank you candy great to be here what a difference a year may exploit it isn't different I mean you know if you look at the the I think we probably end up having more snow this year even though we didn't think we would do I did last year trial but not other than that there are some other significant changes to actually Alter the good to a you know to a great degree I mean again. I'm not getting in politics start I'm saying from an investment perspective and a financial perspective. So much in the news is so much better than where where we were a year ago and in case you've conveniently blocked off outlook last year in mid February is like you may recall that's when the S&P 500 which is an index of 500 the largest publicly traded stocks in the United States. Had dropped 12%. In the first six weeks of the year that was a bad start it's a good start right you know went and I think you know people were ot. Appropriately. Worried concerned Q and and many said this is the beginning of of our country the end of the cycle through our and so forth we saw a lot of that the person who has any real gnashing of teeth going on in some of the TV networks while not on the TV networks but frankly even some of my friends on the radio as well old came up with similar outlooks and I have to tie at the time we did a paper that we made available to our listeners are and you know the one of the biggest indicators and driver of the markets being down at that time was oil to remember that the price of oil dropped from the mid thirties in the mid twenties. But I from the end of 2015 to the first six weeks of 2016. And there or Goldman reports and other pretty reputable reports saying hey could the price will drop from 25 Don at twenty to fifteen and so forth. And we wrote a paper including us in a week showed a supply curve by producer and all kinds of other stuff that's at no. You know I mean could it happen it's in aisle for very short heard it time Sharon ending it happen for sure very short period of time it was completely unsustainable. And we made the argument that the price of oil had to rebound. Over a reasonable period of time and that was. Based on a whole bunch of variables will be one of the key variables was we were not buying. The fact that many people were saying that the demand worldwide demand for oil stock was said no isn't. And if anything what came out was there's an TIAA report that came out. Our shortly after the middle part of February that said hey guess what worldwide demand continues to increase and and that to me. Was really the Bellwether. That changed a lot of the outlooks after that were you know demand for oil gone from. 94 million barrels a day eight and 95 million barrels a day bright green in 2015. Or 2014 and 2015. And you know what he continued to look pretty good for 2016. So. As a result we said we you know we said we think the price of wells gonna finish next year and on the words and 2016 you thought the price of oil would be in the high forties low fifties. And sure enough that's kinda where we land it. And our our first the prognostication. Is that over a period of time over the next two or three years we expect the price of oil to continue to increase by caller ten dollars a barrel per day per year soma the worst go from us our ten dollars per barrel per year so go from. C 5053. Dollars a barrel today. To call it sixty by the end of this year seventy by the end of the next year or an eighty. Which we think it's kind of the longer term equilibrium price sometime in kind of the 2019 timeframe you know cart timing be offshore but direction only do we think we're right now. And and it's based on a whole bunch of factors including. How long's it take to deplete existing wells that are already producing and then you have to drilling new well listen total cost control well also the stuff the week. A built into what. Long story short as. You know we were not one of those people said oh boy this is the beginning at the end right what we said was you know this is a time for Winston Churchill to talk about stiff upper lips and and get back out there are and if anything I'm in because of the losses you sustained in your portfolio this is actually the time to purchase. On something that may not look attractive right now but actually may be the ideal time to purchase it. Upset another way timed to buy low now great people are so funny and it's why individuals are not terribly good investors is. And it's you know when if you're buying whale when the price of boils dropping from 35 dollars a barrel to 25 dollars a barrel you know you're essentially opening you dropped to an opening yourself up to some open shaming he helped by your friend stern but the other side as you look like a genius if you buy it 25 and the price of oil doubles to fifty which is essentially what happened. So my take is I don't care what people think about what our strategy is from an emotional perspective. The question is do you ever reasonable rational. A strategy. I doubt you can support will his economic data and that's what we had that's what we follower and and and and it proved to be quite good and and by the way if you had kind of chickened out you say hey this is this you know this whole thing I've had a nice run up for the last her for years and ever since 2009 to 2015. Hey I'm taken my money and and running and you. 2016. When we tell you what you would have missed out okay on the S&P 500. You would have missed out only 28%. Increase okay that's that's that's a big number we thank you know when you're 28% yes so am I exact alone is just. Actually been kind of mind boggling to me crude oil prices are a 103%. From a year ago the ten year treasury yield has increased from one point 6%. To 2.5 percent you might silhouettes not a lot. Well it is a lot of few owned treasuries you bought treasuries at one point 6% or not you can buy in new treasury ten year treasury at 2.5 percent because guess what the value. Of your ten year treasury that you bought a year ago. Is it worse sorry. It's worth you know us you know ten or more priests around 10% below. Part this point I'm okay. And so you know and by the way the last thing the volatility of stocks is weighed down the volatility of stocks is down 60%. From where we were a year ago so you would have got you would have missed out on a 20%. Up on your portfolio and the same time things would have gotten calmer and calmer compared to a year ago. That's a far cry from you again you licences some of my friends on the radio the talk about hole have we hit all time highs and I don't care about that stuff when I I look at the underlying fundamentals. And say. Is there's still opportunity in this what's gonna fuel what's gonna be underneath it and that's really weren't talk but the outlook today at about the 2017. Outlook. Is yeah we actually believe there's more upside associated with a list. And if anything I should've bought some credibility from our audience based on our prognostication. From last year or so it's probably worth at least considering what we have to safer this year because frankly. Our clients are counting on us getting you know a lot of this right. And and social listen to this program regularly Paul don't hope we were able to take advantage of some of that knowledge they've picked up where. And and we're gonna get you morbid give right now let me just remind post. If you did listen last year and you in paying attention and your thinking can this guy and knows what he's talking about. A well you're right some believe you postal free numbers so that maybe he can do the same for you 889727526. That's ADB 972. Planned or ignore the plan's strong dot. And you know off from a regulatory perspective armed choir to tell you that past performance can't guarantee future results selfish you know don't common sale all Paul may 28% or that the market may 28% from the bottom a year go to today so sure if that's skies act good I should make another 28% this year no that's not what I'm saying I'm specifically not saying what I am saying is we use a pretty what we think is a pretty good process. Are to evaluate the existing environment. And I try to identify where we think the economy's going overall and then where there are specific opportunities within the environment. Also. And Paul I think it's important note to this point to that since we are exactly six weeks into this year. Folks who took the set it and forget it that attitude a year ago because things were mass and they said OK we're just gonna put ourselves perhaps and in safety and we did there yup. Tom boy. They did or did missed out on a lot. Are they did that end the whole set it to get it but it's set it forget kind of approach. Are icing couldn't be more an appropriate when you think about what's the environment like. Two day vs the environment a year ago you know you had a democratic president. Vs a Republican president you you had Britain's staying in the European Union vs Britain leaving European Union you have a whole bunch of other factors whether to Affordable Care Act or. Now regulations. Are related to the financial industry or whatever you wanna talk luck there are so many changes mean just think what energy alone Kenny what's happened. The difference twenty year we're going to they would energy you know Obama. Fiercely opposed. Any kind of pipeline construction. Donald Trump us for six weeks four weeks on the job harmed Perez as Torre said hey please please go ahead and do the two pipeline jobs but Obama said absolutely not we're not gonna do them. I mean if that doesn't tell you that there's a huge change in the environment I don't know what can and if you think that the seem investing approach can work. For a year ago vs today I would beg to differ. Okay what's your postal. He numbered find out. If in fact you were set it for getting kind of person is ADB 972752680. 8972 planned. Or plans strong dark comedies with all his team in the U which you know perhaps some changes you may want many. And it you know what Kenny we should talk about what happened this week even because. You know what's fascinating even some of my friends on the radio today. Come out with ominous warnings about all are we hitting the the peak of resurrect are always going through. You know moving averages and all the stuff that. And 99% of America doesn't know outer calculated. On the book that the short answer is hey that's all pot you know that's great but. Stocks were up one and a half percent this week run in the US okay which which is a lot for a week yeah you think yeah I don't think of it this way one and a half percent times 52 all right is a big -- so they're okay and that's what your annualized return would be if the market moved up that much every week for a year and a great so think of that so one and a half percent you could have missed out on if you would say you know what that Blair heard that add an honor I really should be really care Fleischer protect what I have and I shouldn't look for any more upside well he would have missed out on one and a half percent this last week. That alone is something. That you say to yourself wait a minute I need something better than oh I guess were close to the top where the market historically stand. You need to know much more than that frankly to manage a portfolio properly so we come back I wanna talk about what the markets did this last week. I've got some really good stories for you Kenny and I don't talk about our outlook for 2017. So coming up when we return to supply a strong financial form. This is all Parsons president of planned strong investment management. And you're listening to them plans strong financial forum on WRKO. Boston's talk stations. If you like what you hear on our show and what immediate take a look at your investments and retirement plan called my office of EDD 89727526. That's 888972. Plants and. Hi this is Avi Nelson. People use different strategies to acquire enough money for retirement. Some try to do it themselves others buy insurance or investment products though sometimes will benefit the seller more than the buyer. What makes sense is to hire an advisor with first rate credentials and why do investment management experience. Should have a fiduciary obligation to act in your best interest. And be paid the same amount no matter what your invested in if these things matter to you. Call Paul Parsons at planned strong investment management to learn more call 888. 9727526. Hiring the right advisor could be your best investment that's 888972. Plan or vision plan strong dot com. Securities and investment advisory services offered through next financial group linked member tumor SIPC plans to investment management is not an affiliate of next mention grouping and is located at 980 Washington street Dedham mass. Okay. Okay. But it's. It's. The. Crumbled and strong broadcast studios at the epicenter of definitions. This is no plans strong financial forum with a whole portions president of planned stronger investment management and I can Garber at the anchor desk along with Paul also. Remember once again is EDD 89727526. That's eight navy nine so on to plan. And if if you're one of those said it and forget it kind of people as we discussed in the last segment to you missed out on a lot left a lot of money on the table they wanna give pollen his team call. ADD 89727526. Pol. You knew you had a smile and appreciate you telling me some of the about a movie but you didn't finish in the because the commercial real comeback kid and so will resign. Well the that there classic joked that everybody on my friends sham land and many listeners I think on the show now know that around Christmas time on the huge fan of of what movie Canon. Love that color Sharia. Which is you know just agreed she grant movie was great and makes you could feel good calling stock options anyway it's a feel good bowl OK okay it's a wonderful life is a great movie love actually is not great that's our Selena her let's move on so anyway I got an email yesterday and I wanted to make sure that any of listeners that share my complete in factual issue with love actually mean holes and listeners who share your resolve it and stop that you ready for this and love actually. Is going to. Have that the cast of love actually. Is gonna have an updated seen. On BD BBC 10 in the middle of march on where are they now that character Stalinist Soviet ten minute sketch. And so. I and my son in law sent this to me and of course the ridicule that followed the in my mirror and my family members and friends. Was was at a new level there anyway I am so excited so if any review our love actually fans like I am. I am axle looking Fortis and the question is so how can we get access to be be a BBC one rises -- as opposed to BBC America for I will find a way and if you're interest and I'll make sure you can access the sink is on talent yet. I'm gonna find this and watch I'm very excited tomorrow 10 whole minutes I am so excited the only problem is on one of the actors has passed away and so I don't know what they're gonna I mean. When late they might work that is why don't you would think the but I it's gonna be hard to haven't seen in about it tells him he. How the rest in say something about it yes exactly right okay well that's it took so that's big you know just big news you know ten we are full service radio show not only do we talk about sports like last week though talk on love actually the greatest movie of all time OK some people sports sometimes cars Alia that stroke and a couple of movies mostly money more. A lot of money I hope that let let's let's just back a little bit and covers some of these the news stories are tired of the market is what happened last week some of the news stories investors really should be paying attention to block. Yes so first of electricity US stocks this week where about one and a half percent that's a real nice week international stocks robot. Up about half that much year to date. Yes and 500 which I explain over and over an index of 500 the large spot trade stocks in the US is up about 5%. Year to date in the first six or seven weeks. Accidents go to break. An international stocks are up about 6%. So it has been a very very good start to the year whether you're in the US. Or internationally in the stock markets and at least for the US stocks we have yet. Up all time highs in all three major indexes. In the US this past week. And and we keep hitting all time high as it seems. This is not the first and we've done that recently listen we've hit we just keep it nice now you may do remember that we talked about which sectors will then. On the United States stock market we thought up potentially showed. Good promise at the end of last year the beginning of this year and I wanted to talk about. Actually what has done well so far this year so if the recipes up 5% so far well which ones are up even more so and the answer is. Tack health care and consumer discretionary does that sound familiar I guess it does is does the only thing that hasn't outperformed. That we expect outperform over time is energy okay. And energies actually underperformed in fact it's the only sacked year. Year to date that has lost money as a sectoral brought down about two or 3%. Vs like I said the market itself up about 5%. But you know even you know financials of outperformed health care's outperformed industrials about performed. Consumer discretionary czar performed and technologies are perform the only other area that's underperformed other than energy. Bond substitutes don't we talk about that so perhaps this that if interest rates are going up then bond substitute should get hurt by that and they have so what's a bond substitute. Think utilities and telecoms and and not real estate there are probably the best and even some consumer our consumer staples so. Socialists whose show are picking up since this new small bits of information. And let's talk on the ball inside and shore on. You know again if if if stocks have done well then you'd expect Barnes to not do as well are typically people either go risk on our risk off and in fact that's what's happened this week. Are the ten year US treasury at it as now traded up about ten tips from a a year a week ago so it's now up and by the way a basis point 1000. Bills percent drawn in that term regard here very nice so instead of being 2.4 percent last week there about 2.5. Percent this week for the ten year US treasury. And year to date essentially flat so if you're in. A ten year at this point you've made no money. I Hank Aaron and then on as it relates to. I German bonds which we always look at our German bonds also saw their yields go up a little bit they went from a call up point 32 almost point 4%. On a ten year while the Japanese ten year remained flat at around point 1%. And and importantly I'm gonna talk about this and a new story in a minute. On import only the the chance the probability. Of a fed could wreak increase went up significant. And that's because guess what we've pretty good dated this week Aaron OK and based on that good data on the Fed came out and essentially said you know we're looking at this more. And we may raise rates sooner and some pop op postulate that may mean even as soon as march not may or June. Just because at that. The the probability. Of Fed Funds seeing a rate increase jumped up to 52%. In on the may timeframe that's up from 28%. The week before so big difference there as far as the outlook for interest rates short term interest rates. In the relatively short term period. And the dollar strengthened a bit a little bit yards rerun a dollar six per Euro but a 114. Yen per US dollar. So it's strengthened just a touch and it and it weakened a touch against the Mexican peso the peso now is still ridiculously cheap at. A twenty point 25 pesos per dollar. And oil prices were stable from. No news on oil 53 bucks for west Texas 56 for Brent and you know crude oil inventories were up. Not a good number ten million barrels of sweet that's not good news as it relates to where the price of oil's going. It now represents a 10% increase. Over the same period last year that's a lot of inventory sitting out there you gotta work your way through that inventory for prices to go up. Now we we do talk about data every week ball out and you always tell people do don't we don't want you to flawlessly during that I discussion now works fed this is the Fed looks do when they're thinking of a bump and those rates right and and we got some I would say if I was gonna give deed kind of agreed this week I get out of EB plus seat as far as how good the data was as far as. How bullish Vegas four on the US ally economy let me give you a couple of key numbers first the ball. We saw decent inflation that's really important for the Fed to Fred looks at inflation because. Not that the key reason that the Fed would ultimately. Trigger. Not any kind of a rate increase would beat a fight too much inflation we have we've had the opposite of that. We haven't had enough inflation Welch who producer prices were up opry substantially in January. And also consumer prices were also up. I'm in January 1 is December and and now or a point where we're getting much closer to the Fed's target for inflation so. Give a check mark there to inflation is getting closer to where the Fed would like to see it prime retail sales were really strong in January up you know point 4% vs December. And again so what's point 4% while multiplied by twelve. That's almost 5% annual growth for retail sales that's a really robust number and what that does that reflects that the consumers confident the other out there and they're buying stuff retail sales. On and and excluding autos sales were up by the way point 8% or about 10% annualized I mean that's that's a big number right okay. And then manufacturing reports this is the only thing that would give the lead meat and not give the week's data and eight for bullishness. There it was kind of mixed on overall industrial production was up. Kind of a mediocre arm out about point 2%. In January but some regional reports from northeast producers whether they were the New York fed. Or the Phillies sad. They were either strong or. Very strong. As they as they reflected economic activities that was our shot of really good news you know you and I've talked about manufacturing being kind of the last last person in the DNC I'm well they're finally kicking and China while the overall national number wasn't terrific I have to tell you some of these regional numbers are really starting to reflect a more robust economy. And then finally housing starts another really par important part of our economy. They were down just slightly in January from a very strong number in December and year over year. Our housing starts are up six point 2% for single family homes that's a good number right okay. And then finally on the employment side initial unemployment claims came in at 239000. And Kenny if you know one thing you know that's a good. Numbers are really good number right so overall you got to look at that say. Hey that was a pretty good week for gay. When we come back well we're going to discuss a little Valentine's Day message Luke Luke obviously cannot massacre in total it's very positive message from chairman not chairperson yellen right when we return disciplined strong financial four. This is tall Parsons president of planned strong investment management and you're listening to the plan's strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what need to take a look at your investments and retirement plan called my office. 8089727526. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member to go as I can sequester investment management and building a business financial group thinks is located in Washington street domestically and six. Hi this is on he Nelson if you're fifty or older. Commit to getting your financial house in order. Over the years you worked hard took chances made sacrifices. And built up as much wealth as possible so you'd never run out of money in retirement. Well. Now it's time to get organized and to make sure you have a financial plan will protect your retirement. If your financial life together. Call Paul Parsons at play and strong investment management to schedule a financial check up. Call 8889727526. That's 888972. Planned commit to getting your financial house in order call 888972. Plan. Or visit planned strong dot com. Securities and investment advisory services offered through next financial group linked member tumor SIPC plans to investment management is not an affiliate of next mention grouping and is located at 980 Washington street Dedham mass. Finally rid your show has not trying to sell you insurance or movies. This is no plans strong financial forum quick call portions. President Roh plans strong investment. And Scarborough and anchor desk along with all Linda as we're talking about being the program. It's not ex exactly one year removed from the dark days of mid February 2016. And boy what a difference a year makes just a tremendous difference in an old Marcus who just ended in the outlook as well just absolutely huge difference. So polls remind you that if if you invested the same way as you were a year ago. That might not be terribly prudent to quote Paul. It to where I would look at it is. Well Tony no shots. I never set earlier estimates say that not yet know exactly I would never say that about our client of course not but it. I think what you would say is you may be leaving Somalia table and that's something nobody wants to hear quite frankly I kind of sticks McCraw a little bit. As best would be to win you know. As my dad says it doesn't grow on trees that your dad is is a wise man. So balls till three number eighty 89727526. That's AD Dade nine soon to plan or go online to plan strong dot com. Cinnamon email sent about time we can go and sit and talk to Paul Paul will be their person leak as rules of the members of his team. It to tell you what changes perhaps you could make so that you're not invested the same way you were last year when things looked. Completely different this is that the complete opposite of says it and forget it because if you did that witnessed it didn't work for. Once you the don't remember aided 89727526. Are impossible for the break we talked we mentioned a Valentine's Day message to little sweet gift from from Janet Yellen. Would tell us what we heard a mode means well. We just got on target market data and yelling gets that data and then stopped right and so she's acutely aware. Of of that the state of the overall US economy as well as the risks that come from international laws to chew Asians and everything else. And on Valentine's Day this past week she signaled the Central Bank could consider recent short term interest rates at its next policy meeting in March. Which you know you and I've been saying is gonna be may or June we are looking at the Fed Funds futures. But this really are is something that that accelerated. The thinking that there may be a rate increase certainly. Now in the may timeframe and even with the prospect in the march timeframe. And and the reason for this is she's generally upbeat about the economy at this point with a much longer list of reasons for optimism then for worry and and why is always important it's really important because the Fed is really trying to telegraph. What their plug their plans are so that should not shock the economy so they're telling me economy a couple of months in advance probably. That hate worker probably start to continue to normalize. Rates were gonna raise rates slowly we're gonna monitor to make sure we don't do too quickly and everything's prudent and measure erred and all those words are incredibly important because what they don't wanna do. Is shock the Connery if they shocked the economy then. The people that meek economic decisions could be shocked and if they get shocked they may say you know what. I I I shouldn't do that plan and marsh into that program anymore should do something anymore. And as a result it's very important for them to deliver this over reasonable period of time so. I think the likelihood of a rate increase went up pretty substantially this week compared to a week ago. The big gun known Kenny. Is the impact of president trumps programs whether new regulatory changes. And and you know we saw forget the political thanks forget about Russia. Okay it's hard juvenile cannot no no we're not talking about that stuff we're literally talking about you know what's gonna happen would Dodd-Frank what's gonna happen with. You know a the fiduciary world are your whole bunch of things that are uttered just. On the regulatory side on debt are unknown and then and then by far and away the biggest elephant Roma's well how about the tax. Our cot and when does that happen and what does it impact and what are the number is gonna be light and does it include a border tax and all this other stuff those are very very important things and so. You know dole said that's the unknown. That you know one as much data as she has she doesn't know what's gonna fly. As it relates to what happens on Capitol Hill. And so it is gonna get interest staying they have to kind of play it carefully. Are taking into account the risks associated with those things are happening or not happening. But in any case interest rates look more likely to re rice earlier now than they did say a week. Is there possibility Paul because I think we've seen this from her before that she's. Letting us know a little early to perhaps. Bill did yeah yeah so the one that does happen we won't feel as well. She eat what your saying is what the what the futures market has priced in the futures market QC low probable in spite of her saying oh yeah I could you know we should discuss this in March the futures market still use that as a minority probability. But the futures market our views may SE majority probability at this point. Okay so in other words I think you're exactly right now we think it. These are about the big dummy pages earlier I can't say epitaph GE. Here's another story Apple Computer do they did have some months through the didn't look great irons a little which is worse it right yeah considering as apple I mean it was still great but just as various market cap company in the world right or certainly in the country in the US certainly so after after some bed quarters suddenly. They had a big number they did their. Their market value clips 700. Billion dollars that's with a BER. And then you might ask kind of what is it that's doing it. Well I think the thing and arm reading is that investors believe that the tenth the anniversary iPhone which is expected later this year. Is actually in and out build the momentum in the security. And and frankly in the overall outlook for the company. And now by the way another thing happened was recently reported that off that Warren Buffett's Berkshire Hathaway. I took a position. On apple acted depth when apple was down when they were down in note two or three quarters were their revenues were down and and people were saying always is the beginning of the end for apple and it's unsustainable. Well Warren Buffett body and and done and guess what you know he's been richly rewarded for its positions so far wow. And and you know the other thing that's going on is apple may be the biggest beneficiary. Of the trump administration's. I tax legislation. That could allow for the repatriation. Of in the air case. 230. Billion dollars of cash you may have heard this about 2.4 trillion dollars. Of corporate profits that are overseas some and a lot of companies have said hey we're rocker repatriate that cash. Until the tax rate that we have that essentially wash it through to get back in the US. Comes down from 35%. Well. Think about it this way. Apple represents 10% of all. All of the profits that are held overseas. And you know they're looking for a discount going from there instead of 35% tax and the trump administration is talking about a 10% one you know or short term. Repatriation tax that would save them 25%. On 200 billion dollars now you talk about real money Fannie. That's real money. Some series money you mentioned the iPhone tendon which. Kind of intrusion so what puts up that well first thought Arnold its iPhone tennis that it's that ten year anniversary mod me camera with a number and well yeah they're thinking it could be the iPhone eight which is the successor to the current model is an iPhone seven. Or maybe the iPhone ax which would be what you said that ten there are because it's the tenth anniversary so we don't know what it's gonna be called up and and by the way you Apple's very secretive about stocks are I don't know of anybody knows the answer our money ensure that decision's been made but. But the more important thing as. Why are investors excited about it and what are kind of features associated with the same they're really gonna that fuel the next group of but the cycle the super cycle of purchases of these phones. And it has to do with this first of all it appears that the new line phone is gonna come in three size is not too. Okay second thing. Is that an OLED. Case that'll be made almost entirely of glass make this thing that's cool very cool that's cool okay yeah. And it could have wireless charging capability which till now it's not hat okay. And you know if if a number of those things happen and there are some other gizmo. I aspects to them true that may come out. It could be the beginning of the next if you will super cycle and east happened periodically what apple comes out with the new Ager were improvement to the product. So that there are a lot of people turn their own phones are they you know they go into disrepair and have to buy new phone and they decide to by the newest model that's what investors are counting on at this point that's why the stock has done so well recently. Now Barron's had list. Worry Paul regarding cloud computing we've been talking about cloud computing. A bit the last two of certain last year yes what is parents saying what's this hour Guba well there's a contributor Pacific Crest Securities did a are contributing articles to Barron's and name meaty very strong case for a very good year for cloud computing and 2017. And they what they do is diss you like these kinds of analysis as what they do is they actually figure out. On you know of this top salary providers. How much equipment are they buying you know that kind of stuff and and more importantly are they dropping their prices at all to be able to attract more business that kind of stuff and and what they've essentially said is it looks like expansion plans look very significant for the east to the tune of about. 19%. More investment in these 2017. After your 23%. Investment increased. In 2016 dolls are very very big numbers and on and the same time already they know that Amazon and Microsoft have been talking about cloud pricing cots. And that could further stimulate you know people moving over from enterprise computing over the clock out there so obviously they like you know what they think you should consider looking at the major providers if you wanna know who the major providers are of course alphabet Microsoft alphabet schools now. Microsoft. Amazon's they do gorilla the biggest one Amazon Web Services. FaceBook Alley Babcock and salesforce. Are also very very big providers the other thing that they said was hey by the way. This could benefit more than just. The the actual cloud computing companies take a look also at the reach the real estate investment trust. That on own a bunch of these data senators because they may also do quite well in an environment where you have more data centers that housed geese. Our cloud computing operations. Paul momentum back we're going to look at the parents outlook for 2017. When his parents saying about the upcoming year. Was it mean for investors when we return splints strong financial form. This is Paul Parsons president of planned strong investment management. And you're listening to them plans strong financial forum on WRKO. Boston's talk station. If you like what you hear on our show and what media take a look at your investments and retirement plan called my office. 80889727526. That's 888972. Plan. Securities and investment advisory services opportunity for me to prevent the opportunity as I can see classroom investment management is an affiliate of this financial grouping is located in Washington street and Massachusetts. Hi this is loving Nelson. People use different strategies to acquire enough money for retirement. Some try to do it themselves others buy insurance or investment products though sometimes those benefit the seller more than the buyer. What makes sense is to hire an advisor with first rate credentials and why do investment management experience. Should have a fiduciary obligation to act in your best interest. And be paid the same amount no matter watcher invested in if these things matter to you. Call Paul Parsons at plan strong investment management to learn more call 888. 9727526. Hiring the right advisor could be your best investment that's 888972. Plan or vision plan strong dot com. Securities and investment advisory services offered through next financial grouping member humor SIPC plans to investment management does not definitely did not mention grouping and is located and I need to Washington street Dedham mass. Ground zero for your financial news and economic commentary. This is the plan's strong financial forum where Paul Corson to president homeland stronger investment management. And and Karen are very as the anchor desk along with the ball once again polls go free number eight BD 89727526. EDD 8972. Planned or you can go online to plan strong god common sending email separate and employment were younger when sit with Paul and his team and dark about the fact that she Paul. Iced I kind of set my idea plan my investments or your goal or more. Or even six months ago quite frankly or even months ago before the election. And it should I keep going the way they are now. I think Paul would probably recommend to me you make some changes but to be happy to look at how you're set up now basically the idea is. Did you set it and forget it are you invest in the same way you were a year ago and if so all halting CC should start with you perhaps. Awful lot's changed and yet we are a little Susie if you think things are the same today as they were a year ago then you know I. I don't know other than the the sky is blue it's a lit right how does that earlier but I mean as far as economically. And from a market perspective I would argue that things are quite different and you know just think about risk alone and in Europe you know a year ago. No one knew that Britain was gonna exit the European Union nobody even thought about Marine Le Pen in France and hand the possibility of France even contemplating a fraction at our friends leaving European Union. No no just think about the president of Italy was it was Wednesday it was pretty popular guy back and he's out of a job to happen. And you know they're having new elections are this summer this fall. A year ago Merkel was pretty popular miracles running for reelection and she's run an uphill. You know I can go on and on I have to tell you Europe looks to me to be riskier certainly riskier than it was a year ago that it may not change your strategy but it it it's certainly should change your outlook for what could happen in the air content and how much risk you are assuming by doing Mac by in no knowingly investing mirror in the in the proportion that you are. Also remember once again. He BD 89727526. That's eight BB 972 plan org online to play and strong dot com. And to send them an email set up a time coming up this week or next when you can sit down politics about an hour so Paul does attend every one of those meetings. Our poll we had promised no look and and baron's does this annual meeting where they grabbed ten or so of the top people up and say all right what do you think what's the outlook. Energy if you Ian you're not sure what we mean by top people all I'll just give you one example the chief economist for Goldman Sachs is a leading named Abby Joseph Cohen and she says she's a Smart lady. Anyway she just announced that she was gonna be retiring after this year will there were stories in the Wall Street Journal for three or four days this week about the fact that she was retiring. Are going to have people pay attention girl so I mean she's she's a pretty impressive lady and and is she always right no but she's right a lot of the time and she gives she gives a very good. Armed rationale. For why she thinks certain things will happen moms so. Anyway as you said the Barron's roundtable got together as usual Barron's did this over three magazines over three week jury which you know if you can get through that god bless you got the good news is we light green that's after standing up but. I've tried to condense three weeks' worth of magazines into you know five or six minutes segment on her show to give you an idea okay. So let me give you some of the highlights of what the round table overall is thinking. First of all the group generally expects stocks to perform well in the first half of the year but to have a tougher second half of them and they expect on the full year. To have our total return. Anywhere from minus 5% down 5%. The end of the university in New York two up 7%. Remind you yes and 5% your current so this you know based on this their most optimistic person would say whilst only got another couple percent to go this year. And what are also saying is it's it's a really tough you're forecast. Tell tell somebody who cares what the reason they think it's an especially tough your forecast is because there's a lot of uncertainty on trade. On taxes and on regulation and so that really does ring true to me that you unlike other times. Armed you know I would say there are a lot of variables in play right now. So let's talk about that now about the first half first is the second half thing on the first half of the year but do you overall sense I. I think there's something to list. The market is gonna focus on tour on trumped. And kind of celebrate his moves are I think your seeing that you're you're seeing people talk about you know improving animal spirits of the market that people feel more confident that they they're looking forward to this tax cut to looking forward to fewer regulations and the impact of what it means for economic growth. What these people are also saying is. Then there'll be some interest rate hikes and yellows Horry said we're gonna have interest rate hikes. And when those start to really. Kick in and especially in the second half of the year then those start to slow things may slow start to slow things down a little bit. And you could have increased geopolitical risk and I just got to turn what Europe in a whole bunch of those elections. Happen this spring and summer. And so once those things are known you know if if France decides stood to leave the European Union I would say that could materially. Adversely impact. On the overall economic growth of of worldwide GDP. So that the first half second half view is popular amongst the group and that's pretty popular from a lot of stop I've been reading. Are also other the first half of the years ago after the year ideas are is there anything else that the agree on overall yeah so. On the overall basis what are saying is it could be a tough year for the market put a good year for stock pickers. And you know picking bigger winners and and frankly some losers. And the reason that this is somewhat unusual is because. Correlations a marks the asset classes are actually decreasing set another way. You know a rising tide is knock a lift all boats in the and they actually think some areas are gonna do well and some areas art and a perfect example that is. You know think about technology and targeted technology. We've been advocates for quite some time saying. We believe that their real winners. In technology. Whether it's certain chip makers or those in cloud computing Rorer and so forth. Vs those that are on the wrong side of history. And as a result may not do was well so it's you can't just ban on tack you have to go out on which areas of that your of that group might do the best and and day by the way this group of of on the roundtable. Are reiterating that there are saying we think this is much more time for. Overall stock picking rather in the market overall. Many other thing that they said as. They believe that it's time to differ so fire away from on big bill what's called the OK if interest rates are gonna come down interest rates are gonna go up. Then investments that traditionally do. Well in eight down own interest rate mark market thinking utilities and telecoms and consumer staples and real statement. Bond substitutes. They're saying it's probably good idea to diversify. Away from that trade it's worked for a long time. But it's gonna work for a long time until what doesn't and under the or opinion they believe that time is approaching. Heard some what are some of the positives. That over the PC overall yeah first of all they seem good economic growth in the US kinda two and a half percent plus GDP growth a positive for 2017. DC good earnings improvement you know think 10% plus earnings growth and you know I've talked about both of those numbers you know I'm armed they are we don't mama it you know in that neighborhood I think economic growth could actually be a little bit higher than two and a half percent. Armed and they also see corporate and individual tax rates coming down. And taxes on corporate cash held overseas could also be reduced we talked about that repatriation. And as a result US companies are gonna be more competitive with the rest of the world all of that is good it's good stuff. The one thing that they're not necessarily agreeing on and this is in a shock. Is they don't know what the timing is going to be and they also don't know if the sings gonna be retroactive. To the beginning of 2017. Those are a couple of uncertainties that while the overall trend of going to. You know a reduce taxes is terrific freebie economy if it isn't retroactive. Or if it takes longer than you thought it would to implement that could impact what the results turn out to be for 2070. Where what are our regulations were they see you there yet they see significantly reduced regulations and that's gonna materially impact several sectors think energy. And not you know certainly think banking. And how about government spending. Well this is one thing that trumpets run on and the Barron's roundtable also thinks is gonna happen and is going to be a positive and that's fiscal stimulus and that's this whole idea of spending on infrastructure kind of rebuilding our crumbling infrastructure thing. And also revitalizing. The military. That a lot of this stuff is gonna be relatively easy to get approved in the short term but ultimately congress is unlikely to approve massive spending on office in in infrastructure. Until age they know how it's gonna be paid for and because of that the question is can they get that stop actually approved in 2017. Still much sure yet but to me by far and away the most important thing is. Will only be able to get the tax bill done and get it done relatively quickly and what all that and off and worked some of the new music C Epoch dwell on the negative side. And they wonder really how much of this news has already been discounted in the market don't forget the S&P five hundreds already up 5% this year right. So you know the question is if if your most robust outlook is 7% up. Well geez maybe a lot of this is built in which means maybe there isn't that much more to go this year and there are concerns that the market is a bit you fork. Armed but you know it's it's still not clear to me whether or not that's accurate it is something though that they brought up. And they certainly were concerned about the timing of the tax reform as a negative because if the timing gets pushed often in next year. I think that's something that the market overall could look at and say you know we don't appreciate that. And finally of course the market's already pricey merit right if you know the multiples are relatively pretty high. And so the question is there you know will earnings growth mature realize that amid earnings growth doesn't materialize. The multiples are already high and so it's unlikely that you'd see a lot of advances in stocks if the earnings are themselves didn't really on grow. To sue with Paul. And his team you Merkel ADB 9727526. ADD going seven to plan. Or plan strong dot com and she do Menino Paul once again a whole lot of really good news full information. We'll see you next week have a great weekend disciplined strong financial four. This is tall Parsons president of planned strong investment management and you're listening to them plans strong financial forum on WRKO. Boston's talk stations. If you like what you hear on our show and what immediate take a look at your investments and retirement plan called my office it. EDD 89727526. That's 888972. Plan. Securities and investment advisory services offered through metro metro group member to go as I can see classroom investment management is an affiliate business financial group thinks is located. Any Washington -- domestic and six and strong investment management is located 980 Washington street Dedham mass 0226. And can be reached at eighty to 89727526. Political views may not reflect the views or opinions of next financial group the securities and investment advisory services offered through next financial group ranked number fender SIPC classroom investment management has not affiliate in its financial grouping this radio show is for informational purposes only and is not a solicitation recommendation that any particular investor should purchase or sell any particular security. 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